Makomo set to bounce back from curatorship

Makomo Resources, one of Zimbabwe's major players in the coal mining sector, is set to emerge from corporate rescue next week after nearly four years under administration.

The company, which operates in the northwestern coal fields of the country, was placed under curatorship in 2021 following mounting creditor demands that overwhelmed its financial resources. Chartered accounting firm Grant Thornton was appointed to manage the company's recovery process and guide it back to financial stability.

Sources familiar with the situation have indicated that the process of returning control to Makomo's board and management is nearing completion, with an official announcement expected as early as Monday.

Bulisa Mbano, the lead accountant overseeing the corporate rescue at Grant Thornton, confirmed that the process is in its final stages. "We are still finalizing the processes, and any official communication will be released in due course," Mbano said.

A document obtained by The Independent revealed that in recent weeks, discussions surrounding the company's exit from corporate rescue have been a key topic among stakeholders. The announcement, which is expected next week, will include expressions of gratitude to various parties that supported Makomo during the corporate rescue process.

"We take this opportunity to express our sincere gratitude to the board, management, staff, creditors, the Ministry of Mines and Mining Development, Zimbabwe Power Company, Zimbabwe Electricity Transmission and Distribution Company, and all other stakeholders for the support rendered during the corporate rescue process," the document reads. "The company has been nursed back to financial health under our care and management. We wish the board and management of Makomo Resources all the best in the future as they continue to pursue their path to growth and create value for all stakeholders and our country."

Grant Thornton has been instrumental in the corporate rescue of several major Zimbabwean firms, including Zimasco, Blue Ribbon, and Cairns Foods. A report prepared by Grant Thornton, dated January 31, 2025, confirmed that efforts are underway to remove Makomo from corporate rescue.

The document, titled Creditors' Update Document, indicates that ZB Bank, one of Makomo's key creditors, is among the first to be paid. "We are in the process of finalizing settlement terms with the remaining approved creditors, after which we anticipate receiving funds to settle with these creditors," the report states.

According to the report, by January 31, ZB Bank had received US$5 million out of its US$8.1 million claim, with US$3.1 million still outstanding. Solar Explochem Zambia Limited has been paid US$75,637 out of its US$139,000 claim, leaving US$64,000 to be settled. In total, Makomo's trade creditors classified as "A" have received US$5.2 million out of a total claim of US$8.5 million, with US$3.2 million still outstanding. Workers, classified as Class B creditors, have received full payment for their US$1.6 million claim.

As of the latest report, Makomo has paid out US$6.8 million to creditors, with US$3.2 million remaining to be settled from a grand total of US$10 million owed to both Class A and Class B creditors.

However, Makomo's corporate rescue was not without controversy. In October 2024, The Zimbabwe Independent reported that Barak Fund SPC Limited, a creditor claiming to be owed nearly US$14 million, sought the removal of Makomo's corporate rescue practitioners, Grant Thornton. Barak accused the firm of failing to comply with court orders mandating a forensic audit into Makomo's finances and claimed that its actions had resulted in a US$13.5 million loss.

Confidential documents seen by The Independent showed that Barak's claim was categorized as a "contingent claim," a financial obligation dependent on future events, and was not included in the payouts to creditors. Barak's legal representatives, Titan Law, filed a petition with the High Court on June 26, 2024, alleging financial prejudice. However, Barak ultimately lost the court case, with the Master of the High Court ruling on January 23, 2025, that Barak had "not made a strong enough case for the removal of the practitioner." The ruling acknowledged that the practitioners had provided a reasonable explanation for the delays in finalizing investigations.

With the final stages of Makomo's corporate rescue nearing completion, the company's emergence from administration marks a significant milestone in its recovery journey. As the transition back to normal operations takes place, the company is expected to continue playing a pivotal role in Zimbabwe's coal mining industry.